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The renminbi has risen 5% against the US dollar since May, to its strongest since early 2019. And with China on course for a more pronounced recovery than elsewhere, its external position the strongest in a decade, and onshore yields unusually attractive …
17th September 2020
While we continue to forecast that developed market (DM) “risky” assets will make further ground over the next couple of years, the rapid increase in new coronavirus cases in Europe poses a downside risk to our generally optimistic forecasts. As we set …
16th September 2020
UK CPI inflation may have fallen in negative territory in August (07.00 BST) Fed’s updated projections likely to underline that rates will not rise for years (19.00 BST) Brazil’s central bank will probably keep its policy rate on hold (22.00 BST) Key …
15th September 2020
US industrial production likely to have increased only marginally in August (14.15 BST) We think that the unemployment rate in the UK was unchanged at 3.9% in July (07.00 BST) China’s retail sales probably rose above pre-pandemic levels last month (03.00 …
14th September 2020
The FOMC will probably make only limited changes to its forward guidance (Thursday) Bank of Japan likely to keep its policy settings unchanged (Thursday) Russia’s central bank may surprise with an interest rate cut (Friday) Key Market Themes The recent …
11th September 2020
Despite the recent resurgence in uncertainty about the UK's future relationship with the EU, we think that it is still possible to make a positive case for UK assets. Although uncertainty around the Brexit process has re-emerged in the past few days, it …
Despite its recent rally, the euro is not particularly strong in our view, and we think that it could well rise further over the next couple of years. Since its lows in mid-March, the euro has gained about 10% against the US dollar, rising from $/€1.06 to …
Peru’s central bank is likely to keep its policy rate on hold (00.00 BST) We expect US CPI data to show another strong rise in prices in August (13.30 BST) Track the latest high-frequency data on COVID-19 cases and economic recoveries here Key Market …
10th September 2020
Malaysia’s central bank will probably cut its policy rate further (08.00 BST) We expect the ECB to maintain its current policy stance (12.45 BST) Political developments in the UK could damage trade negotiations with the EU Key Market Themes While the …
9th September 2020
US fiscal negotiations resume but chances of a bipartisan deal remain slim for now Inflation in China probably slowed in August (02.30 BST) We expect the Bank of Canada to keep its policy settings unchanged (15.00 BST) Key Market Themes While the US …
8th September 2020
8 th round of UK-EU post-Brexit trade talks due to commence (Mon.) US fiscal negotiations set to resume as lawmakers return from August recess (Tue.) ECB likely to deliver a dovish message, but keep its policy settings unchanged (Thu.) Key Market Themes …
4th September 2020
The dislocations in financial markets caused by the coronavirus shock have now largely disappeared and, while there may be further bouts of volatility as the global economy continues to recover (such as yesterday’s sell-off in US tech stocks), our view …
We think that the ISM non-manufacturing index was broadly stable last month (15.00 BST) We expect euro-zone retail sales to have risen marginally in July (10.00 BST) Turkey’s headline inflation probably edged up in August (08.00 BST) Key Market Themes …
2nd September 2020
Front runners to replace Shinzo Abe signal policy continuity in Japan Chile’s central bank may announce government bond purchases later on Monday The US ADP employment report might be a poor guide to the official BLS figures (13.15 BST) Key Market Themes …
1st September 2020
We think that Japan’s retail sales and industrial production recovered further in July (Monday) Chile’s central bank may announce government bond purchases (Tuesday) We suspect that US non-farm payrolls rose by one million in August (Friday) Key Market …
28th August 2020
While we think that nominal interest rates and bond yields in developed markets will remain around their current ultra-low levels for some time, we think that their real counterparts will fall further in the US relative to the euro-zone and Japan. In our …
BoE Governor Andrew Baily to speak at the virtual Jackson Hole Symposium (14.05 BST) We expect real personal spending in the US to have rebounded further in July (13.30 BST) We think the EC Economic Sentiment Indicator rose only marginally in August …
27th August 2020
Chair Powell may hint at changes to the Fed’s policy framework in his Jackson Hole speech Switzerland’s economy probably contracted by 8% q/q in Q2 (06.45 BST) We think that the Bank of Korea will announce more unconventional policy measures Key Market …
26th August 2020
We think that the recent outperformance in local-currency terms of the MSCI EM Index relative to the MSCI World Index of developed market (DM) equities will continue as the global economy recovers further. (See Chart 1.) Back in April , when stock markets …
25th August 2020
US Republican National Convention begins today Germany’s Ifo survey likely to point to a slowing economic recovery (Tue., 09.00 BST) We think Hungary’s central bank will keep its base rate on hold at 0.60% (Tue., 13.00 BST) Key Market Themes Although …
24th August 2020
Q2 GDP data likely to show that Switzerland and the Nordics got off comparatively lightly Powell’s Jackson Hole speech could flag up changes to the Fed’s strategy & goals (Thu.) We think that the Bank of Korea will announce new unconventional policy …
21st August 2020
We forecast that developed market (DM) “risky” assets will make further ground over the next couple of years as the global economy continues to recover from the coronavirus shock and both monetary and fiscal policy remain extremely accommodative. Both the …
We suspect that the coronavirus-induced local-currency underperformance of MSCI’s Japan and Switzerland indices relative to its USA Index will unwind as the world slowly gets back to normal. To recap, after falling by less in the wake of the coronavirus …
20th August 2020
Fed minutes likely may hint at shift towards average inflation targeting (Wed., 19.00 BST) We do not anticipate a cut to China’s loan prime rate (Thu., 02.30 BST) Central banks in the Philippines and Sri Lanka will probably cut their policy rates by 50bp …
19th August 2020
While we think the US dollar will weaken a bit further this year, suggestions that its role as the world’s primary reserve currency is in jeopardy are wide of the mark in our view. Although it has stabilised a bit over the past couple of weeks, the dollar …
We think that UK CPI inflation fell from +0.6% in June to +0.5% in July (07.00 BST) Bank Indonesia is likely to hold its policy rate for now, but resume easing later in the year Track the latest high-frequency data on COVID-19 cases and economic …
18th August 2020
We think that the central banks in Norway, Turkey and Indonesia will keep rates on hold … … but expect further easing in Sri Lanka and the Philippines (Thu.) The Fed minutes may show that policymakers are considering additional QE (Wed.) Key Market Themes …
14th August 2020
We think that China’s economic recovery gathered pace in July (03.00 BST) US retail sales may have risen above pre-pandemic levels last month (13.30 BST) We suspect that Colombia’s GDP contracted by almost 15% in Q2 (17.00 BST) Key Market Themes While the …
13th August 2020
Although we still think that “risky” assets will make further ground between now and the end of 2022, we no longer expect “safe” government bond yields to rise. We have also become more positive on the prospects for bonds in the euro-zone periphery . Back …
12th August 2020
US jobless claims probably increased by 1,000,000 last week (13.30 BST) We think that Mexico’s central bank will cut its policy rate by 50bp to 4.50% (19.00 BST) In contrast, Peru’s central bank is likely to stand pat, but may hint that QE is coming Key …
UK GDP is likely to have risen by around 7.5% m/m in June (07.00 BST) Industrial production in the euro-zone probably rebounded further in June (10.00 BST) We think that US CPI inflation fell to 0.3% in July (13.30 BST) Key Market Themes While a limited …
11th August 2020
The UK unemployment rate is likely to have risen in June (07.00 BST) US producer prices figures may suggest disinflationary pressures are easing (13.30 BST) We think that Russia’s GDP fell by almost 10% y/y in Q2 (17.00 BST) Key Market Themes We think …
10th August 2020
The UK economy probably rebounded in June (Wednesday) Mexico’s central bank likely to cut its policy rate by 50bp (Thursday) We think that US retail sales and industrial production rose strongly in July (Friday) Key Market Themes Today’s US Employment …
7th August 2020
While risky assets have already rebounded a long way since their lows in March, we think that they will generally make further ground over the coming months, albeit at a slower pace. That view is underpinned by our forecast that the global economy will …
We think US non-farm payrolls increased by 1 million in July (13.30 BST) We expect China’s exports to have fallen by 4.0% y/y in July Headline inflation in Brazil probably rose slightly last month, from 3.3% to 3.4% (13.00 BST) Key Market Themes Although …
6th August 2020
The Bank of England is unlikely to announce further stimulus measures (07.00 BST) We think that Brazil’s central bank will cut its policy rate by 25bp to 2.00% We expect GDP in the Philippines to have fallen by 18% y/y in Q2 (09.00 BST) Key Market Themes …
5th August 2020
Argentina and Ecuador’s swift debt restructuring deals may provide a blueprint for other debt-distressed sovereigns. But these deals are not quite the success stories they seem at first sight. In any case, no two restructurings are ever alike, and other …
Euro-zone retail sales probably rose close to pre-pandemic levels in June (09.00 BST) ISM Non-Manufacturing Survey likely to point to a slowing recovery in the US (15.00 BST) We expect Brazil’s central bank to cut its policy rate, but the Bank of Thailand …
4th August 2020
July PMI surveys will probably point to a continued recovery in much of the world We expect a one million gain in US non-farm payrolls in July (Friday) Brazil’s central bank is likely to cut its policy rate by 25bp (Wednesday) Key Market Themes We suspect …
31st July 2020
Policymakers in a few emerging markets have turned to unconventional monetary policies to combat the economic fallout from the coronavirus pandemic, and some may go further into outright financial repression . This note sets out some of the potential …
GDP figures to reveal the extent of the slump in activity in Q2 in the US, Germany & Mexico Euro-zone Economic Sentiment Indicator likely to have risen further in July (10.00 BST) Switzerland’s KOF Economic Barometer probably rebounded sharply in July …
29th July 2020
Fed may strengthen its forward guidance at its upcoming meeting (19.00 BST) Consumer credit in the UK likely to have fallen in June (09.30 BST) We think Hong Kong’s GDP contracted by 2% q/q in Q2 (09.30 BST) Key Market Themes It is hard to envisage much …
28th July 2020
Fed may strengthen its forward guidance at its upcoming meeting (Wednesday) GDP figures to reveal the extent of the downturn in the US & Germany in Q2 We expect China’s official PMIs to have risen further in July (Friday) Key Market Themes While we …
24th July 2020
Over the past few months, the euro and the BTP-Bund spread have moved closely together, with the euro strengthening as the BTP-Bund spread narrowed and vice versa. (See Chart 1.) We think that this pattern will persist over the remainder of this year . …
UK retail sales likely to have rebounded strongly in June (07.00 BST) Flash PMIs to provide insight on the pace of the recovery in the US in July (14.45 BST) We expect the central bank of Russia to cut its policy rate by 25bp, to 4.25% (11.30 BST) Key …
23rd July 2020
US Senate Banking Committee due to vote on nominees to the Fed’s Board of Governors We think that Japan’s manufacturing and services PMIs both rose this month (01.30 BST) Inflation in Canada probably climbed out of negative territory in June (13.30 BST) …
21st July 2020
Although the US dollar has stabilised over the past month or so as fears about a second wave have held back the rebound in risky assets, we continue to think that it will lose further ground over the rest of 2020, unless the resurgence of new cases …
20th July 2020
US Congress set to start negotiating a new fiscal support package Euro-zone flash PMIs likely to point to a further recovery in activity in July (Friday) We expect the central bank of Russia to cut its policy rate by 25bp, to 4.25% (Friday) Key Market …
17th July 2020
We don’t think that the valuations of equities in general are particularly stretched. In any case, valuations are like pieces of elastic – they can stretch a lot before they snap. In our view, valuations won’t prevent equities from gaining more ground, …
We think that US housing starts rose sharply in June (13.30 BST) Rising virus case numbers may have weighed on US consumer confidence in July (15.00 BST) Track the latest high-frequency data on the impact of coronavirus here Key Market Themes Failure by …
16th July 2020
